An increasingly tense dispute between two developers is roiling plans on a prime parcel of land adjoining Wilshire and Santa Monica boulevards in Beverly Hills. (Ricardo DeAratanha / Los Angeles Times)

A California election monitor has dismissed a complaint that accused Chinese developer Wanda Group of illegally funneling foreign money into an effort to quash a rival Beverly Hills condo proposal on November's ballot.

The decision from the Fair Political Practices Commission is the latest twist in a development battle that's pitted developer and Beverly Hilton owner Beny Alagem against a builder controlled by Wang Jianlin, the richest man in China.

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A local subsidiary of Wanda and its development partner, the Phoenix-based Athens Group, are planning a $1.2-billion hotel-condominium project near Wilshire and Santa Monica boulevards, adjacent to the Beverly Hilton property where Alagem wants to build a 26-story condo tower.

The tower would be the tallest building in a city averse to big developments, and Alagem is seeking passage of a ballot measure that would bypass the usual public review for such a large project.

Unite Here Local 11, the Southern California chapter of a labor union that represents workers at the Hilton, had accused Wanda of funneling overseas cash to a campaign committee established by one of its U.S. subsidiaries that is opposed to Alagem's project.

Federal and state law prohibits foreign donors from making political contributions, though subsidiaries of foreign companies are allowed to make donations if they're not under the direction of the parent company.

At issue, is a $1.2 million contribution from Lakeshore East Parcel P LLC, a Wanda entity behind a $1-billion hotel-condominium project in Chicago. Unite Here alleged that Lakeshore East had no reason to get involved in the Beverly Hills ballot measure except as a proxy for Beijing-based Wanda, which wouldn't want to see the rival project built.

But in a letter Thursday to an attorney for Unite Here, the Fair Political Practices Commission said it would not open a case into the union's accusations.

The letter said Lakeshore loaned $1.2 million to Wanda's U.S. subsidiary so that entity could make the contribution, but there was no proof it came from a foreign source. The commission recommended listing Lakeshore as the contributor.

A spokesman for Wanda had denied there was any foreign money or control involved in the campaign against the Hilton project.

Jessica Levinson, a Loyola Law School professor who specializes in election law, previously told The Times that the union was warranted in asking for an investigation, but said proving the accusations would be difficult.

"You need a money trail, almost a forensic accounting, or an admission" to prove wrongdoing, she said.

The union filed a similar complaint with federal election officials. That complaint is still pending, an attorney for Unite Here said.